SCA Licensing requirements
SCA regulations 157/R of 2005
The Broker Members intending to carry out trades on behalf of their Clients have to obtain the regulatory license granted by the SCA. Such Broker Members are required to apply for a regulatory license from the Securities and Commodities Authority (SCA) and fulfill additional criteria as stipulated under SCA regulations.
Guidance Note: DGCX Compliance will assist the Broker Members in the process of applying for the SCA regulatory license and will submit to SCA all relevant documents on behalf of its Broker Members.
A duly filed application form along with the requisite documents are submitted to SCA in accordance with the regulations stipulated under SCA regulations 157/R of 2005.SCA REGULATIONS 157R of 2005 (PDF)
Checklists outlining the documents and conditions to adhere to by the International Broker Members can be found under this section below:
SCA license – DGCX Broker requirements for International Broker Members -- pdf and docx
Checklists outlining the documents and conditions to adhere to by the Local Broker Members can be found under this section below:
SCA license – DGCX Broker requirements for UAE-based Broker Members -- pdf and docx
SCA regulations Administrative Decision No. (123 /R.T) of 2017
On 05 December 2017, SCA issued guidelines in relation to SCA licensed entities applying Fit & Proper, Outsourcing and Chinese wall arrangements. The guidelines are issued as “Administrative Decision No. (123/R.T) of 2017 (the “Regulations”)” concerning controls of financial activities and services.
These Regulations provide greater clarity on minimum staff requirements for clearing and non-clearing Members, minimum qualifications/experience of the key employees, financial obligations, and regulatory compliance requirement of Member firms that are outlined in SCA regulations 157/R of 2005.
Guidance Note: DGCX Compliance will assist the Broker Members, at the time of applying for the SCA regulatory license, to fully understand the requirements stipulated under the administrative decision regulation. Further, the existing Broker Members will be provided guidance to read and understand the administrative decision in conjunction with SCA regulation 157/R of 2005.
The decision 123/R.T of 2017 has to be read in conjunction with SCA’s regulation 157 R of 2005. Please be informed that the Foreign companies licensed by similar regulatory bodies in their countries to practice the brokerage activity shall be exempted from applying this administrative requirements provided that they have experience in the area of commodities and/or capital markets for not less than five (5) years.
Mandatory Regulatory Requirements
Anti Money Laundering (AML)
Money laundering and terrorist financing have been identified as major threats to the DGCX Group and the international financial services community more widely.
Money laundering is the process of transforming the proceeds of crime and corruption into legitimate assets. Anti-money laundering (AML) refers to a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions.
Terrorism financing refers to activities that provides financing or financial support to individual terrorists or terrorist groups. Combating the financing of terrorism (CFT) refers to a set of procedures, laws or regulations designed towards thwarting the financing of terrorism.
DGCX Group recognizes that money laundering can have a significant reputational risk on the organization and its operations and therefore, takes a strict view on non-compliance with AML and CFT regulations. DGCX Group has an AML/CFT policy, designed to ensure that DGCX Group and its Members, comply with the legal and regulatory requirements applicable in the UAE as well as with obligations applicable in other jurisdictions where DGCX Group has business interests. DGCX follows best practice global industry standards, including the globally recognized Financial Action Task Force (FATF) Recommendations on AML/CFT, and strictly adheres to applicable regulations on AML/CFT.
The Central Bank of the UAE requires the Members of the Exchange to file Suspicious Transaction Reports (STR) and Suspicious Activity Reports (SAR) to their Financial Intelligence Unit (FIU) called the Anti-Money Laundering and Suspicious Cases Unit (AMLSCU). The regulations imposed by the Central Bank are fully compliant with MENA FATF regulations.
The federal regulator, SCA, has also issued regulations pertaining to Anti-Money Laundering and Terrorism Finance Combating to be adhered to by the SCA licensed entities. As mandated by the SCA, all SCA licensed Members are required to establish connection to the suspicious cases unit of the UAE Central Bank for the purposes of such reporting.
Guidance Note: DGCX Compliance will guide Broker Members through the process of connecting to the Central Bank’s AMLSCU.
Foreign Account Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act (FATCA) is a US federal law with global reach aimed at curbing offshore tax evasion by US persons. DGCX Broker Members will need to make the necessary disclosure to SCA to enable the transfer of such information to the Internal Revenue Service, IRS of the US.
Entities which do not hold reportable accounts are required to do Nil reporting. The process is completed by logging in to the SCA FATCA reporting portal and completing the reports/or doing nil reporting. Such disclosures are made on an annual basis, once advised by SCA that the reporting system is open for completion of the same.
Guidance Note: DGCX Compliance will guide Broker Members through the FATCA reporting process as appropriate.
DGCX Group Compliance Guidance
Compliance GuidanceCompliance Guidance
Securities & Commodities Authority (SCA) - Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations, Guidelines for Financial Institutions
AML Guidance from SCAAML Guidance from SCA